Dear Colleagues,

Confirming my report to the Faculty Meeting today, I pass along these
comments to the university community.  Monitoring the university's $61.8
million unrestricted E & G budget performance, I have discovered a
potential underperforming of the revenue estimates and a potential spending
beyond expenditure authority.  The range of this discrepancy in
revenue/expenditures could be from $200,000 to $900,000. Our best analysis
is that we probably face a 1% variance in our budget planning.

I feel it prudent to avoid spending some $500,000 previously authorized.
That $500,000 expenditure reduction plus an extra effort to produce revenue
expected through fundraising/gift goals will keep us fiscally where we must
be -- in the "black".

Remaining unspent and unencumbered March 1 is approximately $3,000,000 of the
$61,800,000.  We must reach into that $3,000,000 and cancel spending some
$500,000.  While I have identified the target of expenditure reduction, I
have not identifed the precise targets nor strategies.  Those are being
formulated with advice of the Budget Committee, Vice Chancellors, and
Deans. Among options are reducing travel, end of year supplies/equipment
purchase, communications expense, leaving vacant staff positions vacant the
rest of the year, etc.

We have not interrupted faculty searches, and travel and other expenses
necessary to recruit the 35 open faculty positions must continue. We have,
however, delayed filling any staff vacancy currently existing until July 1.

More details will be communicated shortly.  For a day or two, there will be
hesitation to approve any expenditure until budget coordinators know
exactly the precise targets and strategies of non-expenditures.

Thank you for your patience and for your willingness to know fully our
fiscal affairs. While certainly inconvenient to figure out how to avoid
spending $500,000 now, it is certainly to be preferred over the much more
difficult and uncertain strategy of "hope" that revenue will suddenly
materialize.

Bill Stacy